A sunset clause in a property contract sets a deadline by which the contract must be completed. If the deadline passes without settlement, either party — most commonly the developer — can cancel the contract. Sunset clauses are most common in off-the-plan contracts but can appear in any property transaction.

Why Sunset Clauses Are Controversial

In rising markets, developers have been known to deliberately delay projects to trigger the sunset clause, cancel contracts and resell the property at a higher price — often to the same buyer at the new market rate. Victoria introduced laws in 2015 requiring vendor consent before a developer can trigger a sunset clause, but buyers still need to understand how these clauses work before signing.

How a Sunset Clause Works

• A date is set in the contract (e.g. 30 June 2027) by which the project must be completed and settlement must occur.
• If that date passes without settlement, the sunset clause can be triggered.
• In Victoria, the developer needs Supreme Court approval or the buyer’s written consent to trigger the clause.
• In other states, the rules vary — some offer less protection.
• When a contract is cancelled under a sunset clause, the buyer gets their deposit back but not any appreciation in value since signing.

What to Watch For in a Sunset Clause

• How far away is the sunset date? A date 12 months away on a project that has not broken ground is a risk.
• What triggers the clause — only completion, or also practical completion or title registration?
• Is there a long-stop date that is significantly longer than the promised completion date?
• Has the developer triggered sunset clauses on previous projects?

How a Property Advisor Can Help

Before signing any off-the-plan contract, Collings Property Advisory can review the sunset clause and contract terms, research the developer’s track record and advise on the risks — for a fixed fee of $4,500 + GST. Independent advice before you sign is always cheaper than a legal dispute after.

FAQs — Sunset Clauses in Property

Can a developer cancel my off-the-plan contract using a sunset clause?

In Victoria, a developer cannot unilaterally trigger a sunset clause without either the buyer’s written consent or Supreme Court approval. In other states, protection varies — always get legal advice before signing an off-the-plan contract.

What happens to my deposit if a sunset clause is triggered?

Your deposit is returned in full. However, you lose any capital growth that occurred between signing and cancellation, and you may face higher prices if you want to buy the same or similar property in the current market.

Should I avoid off-the-plan properties with sunset clauses?

Not necessarily. Sunset clauses are standard in off-the-plan contracts. The key is understanding the clause, the developer’s track record, and the market conditions before signing.

Want independent advice before signing an off-the-plan contract? Contact Collings Property Advisory — $4,500 + GST, fixed fee.